Fahid Rahman v Rodney Kent and Tim Orlizki t/a Kent Attorneys

Supreme Court of NSW|2021-07-14

Background

The plaintiff's outline of the background facts are incomplete as it appears that there were proceedings both in the District Court and in the Local Court.
I will refer to the plaintiff's summation of the background together with my references to court documents in the court book. There is not a complete record of court documents in the court book.
Mr Rahman is a former client of Mr Rodney Kent ("Mr Kent") and Mr Tim Orlizki ("Mr Orlizki"), partners, trading as Kent Attorneys.
The solicitors had their legal practitioner/client legal costs for acting for him assessed by a costs assessor. A costs assessment took place and that costs assessment underwent a review by a Costs Assessment Review Panel. The plaintiff was found to owe legal fees to Kent Attorneys. Mr Rahman was ordered to pay Rodney Kent and Tim Orlizki trading as Kent Attorneys the sum of $12,215.50 (CB 6).

The District Court proceedings

In the affidavit of the plaintiff dated 31 May 2021 he deposes: "[4] I make this affidavit in conformity with the orders of the Court made on 4 February 2019. [5] I fell down on 31/1/19 and fractured my right foot and unable to walk to date. I sent a medical certificate and the stay order by the District Court regarding the operation of the determination of the costs review panel dated 22 May 2018 to the Local Court and requested to adjourn the matters. Magistrate Kennedy dealt this matter on 4 February 2019 and made costs order against me in my absence in favour of the Plaintiff, one for $1,820.20 and one for $1,876.60. I was a self-represented litigant in these proceedings. Annexed hereto and marked with the letter "A" is a copy of the email, medical certificates and the orders of the Court. [6] Dicker DCJ ordered a stay on terms that Mr Rahman pay the judgement debt to Mr Kent and Mr Orlizki. His Honour also ordered that Mr Rahman pay certain other costs orders in the Local Court and otherwise reserved costs. [7] Dicker DJC's orders contemplate that if Mr Rahman succeeds in his challenge to the judgement the creditors would be required to return the money Mr Rahman paid. Ground of the appeal at the district court [8] The Grounds set out in the proposed Amended Summons raise, in essence, the following matters: (i) a failure of the Review Panel to give reasons, or adequate reasons in respect of its determination of the review of the decision of the primary costs assessor. (ii) a failure by the Review Panel to consider, or to properly consider, whether the primary costs assessor had failed to exercise her jurisdiction. (iii) a failure by the Review Panel to have regard, or proper regard, to the following matters: (a) whether the primary Costs Assessor had proper regard to all the relevant evidence; (b) whether the Plaintiff [Rahman] had been afforded natural justice in circumstances where submissions not provided to the Plaintiff [Rahman] were taken into account by the Primary Costs Assessor; (c) whether the Plaintiff [Rahman] had been denied natural justice before the Primary Costs Assessor; (d) whether the Primary Costs Assessor had given full and proper consideration as to the receipt of monies by the Plaintiffs [Kent Attorneys] from the Plaintiff [Rahman]; (e) whether, as a matter of fact, the Plaintiff [Rahman] had paid certain monies to the Plaintiffs [Kent Attorneys] in circumstances where the Plaintiffs [Kent Attorneys] denied receipt of such moneys to be; (f) Whether Mr Kent provided any receipt/tax invoice for either of the payments; (g) Whether; as a matter of fact; the denial by the Plaintiff [Kent Attorneys] of receipt of monies on three occasions in fact received was a matter to which the Primary Costs Assessor was obliged to have regard in completing the assessment process and in regard to the credit of each of the Plaintiff [Rahman] and the Plaintiffs [Kent Attorneys]. [9] In broad terms my complaint about both the primary costs assessor and about the Review Panel are that I verbally agreed with the Plaintiff Mr Kent that I would pay him a negotiated fixed sum in respect of (i) his undertaking the legal work in respect of a review of the decision of a costs assessor that I had had in respect of a motor vehicle accident; (ii) Local Court work in attempting to stay or set aside enforcement of the decision of the costs assessor referred to in (i) above. [10] In respect of each of the matters referred to in paragraph 9 (i) and (ii) above I negotiated a fixed fee with Mr Kent and then paid, in advance of him doing the work, the agreed payment. [11] Mr Kent did not provide me a receipt/tax invoice for either of the payments despite my several requests but on each occasion after I had made the payments, I forwarded to Mr Kent an email confirming that I had made the payments. [12] Mr Kent threatened me that if you ask me for tax invoices that it would be higher amount that you paid and there are no signed costs agreements. [13] Mr Kent action fell outside the requirements of the LP Act. [14] I was prejudiced by the delay of two years between the Defendant [Kent Attorneys] issuing the invoices and the Defendant [Kent Attorneys] then seeking a costs assessment that did not constitute special circumstances. [15] I no longer have access to those emails (they were associated with my former employment) and it is those documents, in particular, I am seeking in the Notice to Produce. [16] After Mr Kent had undertaken the work for which he had already been paid he forwarded to me four tax invoices which I refused to pay as they fell outside our agreement. [17] That is what underpins my complaint about the primary costs assessment and the decision of the Appeal Panel. [18] The said Notice to Produce seeks correspondence broadly divided into three categories: (i) correspondence between the Plaintiffs and the primary costs assessor in respect of a meeting between myself and the Plaintiffs at a McDonald's Restaurant in or about July 2014 and the payment made on that day (in particular by reference to paragraph 12.2 of the primary costs assessor's determination[)]; (ii) correspondence between myself and the Plaintiffs relating to certain Local Court appearances which resulted in cost orders made against myself in or about 17 July 2014 and 17 September 2014; (iii) all correspondence relating to payment, tax invoices and records of payments in respect of myself and the Plaintiffs. [19] The matters referred to in paragraph 10 (i) above are relevant to the issues described in paragraph 8 (iii) (b) above. [20] At paragraph 12.2 of the primary costs assessor's decision the primary costs assessor made reference to matters about which I had no notice. This paragraph carried a great significance of the Plaintiff's credibility and the primary costs assessor's action. [21] The matters referred to in paragraph 15 (ii) above are accordingly relevant to my grounds of appeal and to the proper assessment of costs I am claimed to owe the Plaintiffs. [22] The matters referred to in paragraph 16 (iii) above are relevant to whether I owe any money whatsoever to the Plaintiffs.

The examination order

On 8 September 2017, in proceedings 2017/273885 in the Local Court in Rodney Kent and Tim Orlizki t/as Kent Attorneys (as first plaintiff) v Fahmid Rahman (as first defendant), a decision was entered that the first defendant is to pay the first plaintiff the sum of $12,215.50. The order is not referred to by Mr Rahman.
On 11 July 2018, in proceedings 2018/204097 in the Local Court, Rodney Kent & Tim Orlizki t/as Kent Attorneys (as first plaintiff) v Fahmid Rahman (as first defendant) a decision was entered against the first defendant in the sum of $1,925.00 (CB 8).
On 4 February 2019, in proceedings 2017/273885 orders were made that $1876.60 costs were payable by Mr Rahman to the plaintiff and in proceedings 2018/204097 an order was made that $1820.20 costs were payable by Mr Rahman to the plaintiff. The examination summaries were listed for hearing on 18 February 2019 at 9.30am. Mr Kent appeared for the plaintiff. There was an appearance by Mr Rahman (transcript 4 February 2019 CB 29-34).
On 14 February 2019, Kent Attorney's advised the Local Court that it did not intend to proceed with the Examination Order, as Mr Rahman had paid the amount due.
On 27 June 2019, the applicant (Mr Rahman) in proceedings 2018/204097 Rodney Kent & Tim Orlizki t/as Kent Attorneys (as first plaintiff) v Fahmid Rahman, was ordered to pay $2,139.40 forthwith (CB 147).

Local Court order dated 8 August 2020

While the plaintiff seeks to set aside the order of 8 May 2020, the hearing in the Local Court occurred on 5 August 2020 before Magistrate McIntyre. Mr Kent appeared for the plaintiff/applicant. There was no appearance of or for Mr Rahman. Mr Kent advised the court that he had an email from Mr Rahman which stated: "I wish to adjourn the matter for two weeks because my mother passed away on 2 August and I'm out of home since 12 March. Myself and family are now mourning, deeply distressed. I'm not in a proper state to deal with this matter at this time. I've suffered a bereavement." (CB 111)
On 8 August 2019, in proceedings 2017/273885, the Court ordered that the motion be dismissed and the applicant pay $3,000.00 to the respondent forthwith (CB 148A).
On 31 October 2019, in proceedings 2017/273885, Mr Angelkov appeared for Kent Attorneys and Mr Duc appeared for Mr Rahman before Magistrate McIntyre. There was a notice of motion filed by Mr Rahman to set aside the costs orders that were originally made (CB 35). The matter was adjourned part heard to 19 February 2020.
On 19 February 2019, at page 1 of the transcript lines 30-50 (CB 46) Mr Duc stated: "[30] DUC: The situation is that there has been some documents drafted, they have been provided to the Supreme Court registry. There has been some administrative difficulties in having those documents successfully filed. We believe that we can now file those documents successfully this morning with the Supreme Court. They were minor technical issues about having a reference to the wrong court in the back of the filing documents. There was an error necessarily with the orders that we sought, it was an administrative error on our part referring to the wrong court in the back of the Local Court, the relevant Local Court summons. We would seek an opportunity to file that this morning. What those orders seek in relation to the Local Court is for this matter to be stayed for the Supreme Court to have carriage of the matter and for the matter to be ventilated in the Supreme Court. HER HONOUR: Right so tell me about the District Court judge's decision on 30 August, what did that pertain to? [45] DUC: That pertained to a review of the costs orders that were made by the Local Court. HER HONOUR: Right. That was dismissed, is that right?" [50] DUC: That's right.
After a short adjournment, at page 10 of the transcript lines 20-45 (CB 55), Mr Duc and Mr Angelkov stated: "[20] DUC: … we seek an adjournment of these proceedings so we can proceed up to the duty judge at the Supreme Court immediately to seek a stay of these proceedings. It is my submission that this Court cannot deal with this matter. This matter concerns an interpretation of a High Court decision. The matter has not been determined in New South Wales. It has been decided by the New South Wales Supreme Court of Appeal and that decision was overturned by the High Court. The matter needs to be stayed. The underlying issue that the law firm is progressing here is for payment of moneys that cannot be maintained and cannot be maintained since a decision of the High Court on 4 September. If my friend puts forward an abuse of process, it's an abuse of process for the law firm to continue to seek payment and enforcement of these costs. It's an abuse of process to keep going with the examination order on the basis that the underlying amounts were claimed by a solicitor acting in his own capacity. Those moneys cannot form the basis of an examination order, there can be no debt and the High Court has made it clear that the common law of this country never allowed solicitors to claim costs in their own cause. Eldeman J say that at para 98 of his decision and the plurality also refers to that in, I think, para 55. [40] ANGELKOV: Your Honour, I object to these submissions being put to the Court. My friend talks about the abuse of process and then he doesn't talk about how no submissions have been filed or no evidence has been filed, as your Honour ordered on the last occasion. That's an abuse of process - "
At pages 13 to 14 of the transcript, Her Honour stated: "[37] So now in relation to that document do you say, Mr Duc, this will form the basis of your application today to the duty judge in relation to the lack of jurisdiction of the Local Court to have ever made a costs order, although of course the other side said that it never did, as I understand it. It was a costs assessment. … [49] I'm still confused about that. I am actually involved in this for the first time. It's only ever been adjourned in front of me, but anyway. The basis of Mr Duc's contention before the duty judge will be that the Local Court never had jurisdiction to make the orders that it made in relation to those sums, correct?"
Her Honour asked Mr Duc to confirm his argument and its basis at transcript page 15 lines 14 to 22 (CB 60): "[14] HER HONOUR: That they [Kent Attorneys] can't claim professional costs for their appearances on the notices of Motion? DUC: That's correct. HER HONOUR: And you rely on what? DUC: I rely on the High Court decision of Bell Lawyers Pty Ltd v Janet Pentelow & Anor [2019] HCA 29."
Despite what Mr Duc said to the magistrate, that there were some administrative issues in filing the summons in the Supreme Court on 19 February 2020, the summons was actually not filed in this Court until 19 May 2020, some three months later. Mr Rahman now seeks to have the orders of the lower courts set aside on the basis that the costs, although costs able to be awarded by the Court, are not enforceable and thus are irregular, on the basis set out in Bell Lawyers where the High Court held that lawyers cannot seek costs in their own cause.

The decision in Bell Lawyers v Pentelow [2019] HCA 29 ("Bell Lawyers")

In Bell Lawyers it was held that as a general rule a self-represented litigant may not obtain costs for the value of their time in litigation. The High Court's decision made plain that the "the Chorley exception", which permits a self-represented solicitor to recover their own professional costs of acting in litigation, is not part of the Australian common law.
In Bell Lawyers, Bell Lawyers Pty Ltd retained Ms Janet Pentelow, barrister, to appear in the Supreme Court of New South Wales. At the conclusion of those proceedings a dispute arose between the parties as to the payment of Ms Pentelow's fees.
Ms Pentelow then forwarded a bill of costs to Bell Lawyers, which in addition to fees for her legal practitioners, included sums for costs incurred on her own behalf and for the provision of legal services by her. Although Ms Pentelow had been represented by a solicitor in the Local Court, and by solicitors and counsel in the Supreme Court, she had undertaken preparatory legal work and had also attended court.
Bell Lawyers refused to pay the costs for the work personally undertaken by Ms Pentelow. The matter was sent for costs assessment and the assessor rejected Ms Pentelow's claim for the costs of the work she had performed herself.
The costs assessor's decision was affirmed on appeal before the Review Panel and in the District Court of New South Wales. Ms Pentelow applied for a judicial review of the District Court decision in the Court of Appeal.
The Court of Appeal held by majority, that Ms Pentelow was entitled to rely upon the Chorley exception despite her being a barrister and not a solicitor. Bell's Solicitors appealed the Court of Appeal's decision to the High Court of Australia.
The High Court, by majority, held that the Chorley exception should not be recognised as part of Australian common law as it is an anomaly that represents an affront to the fundamental value of equality of all persons before the law and cannot be justified by the policy said to support it.
The nature of the Chorley exception was said to be inconsistent with the statutory definition of costs in s 3(1) of the Civil Procedure Act 2005 (NSW). The High Court referred to s 98(1) Civil Procedure Act NSW 2005. Those sections read: "3 Definitions (1) In this Act - … "costs", in relation to proceedings, means costs payable in or in relation to the proceedings, and includes fees, disbursements, expenses and remuneration. 98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act - (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis."
The relevant paragraphs of the judgment concerning the decision that costs in relation to legal practitioners representing themselves were not part of the common law of Australia are at [3], [39], and [53]. They read: "[3] The Chorley exception has rightly been described by this Court as "anomalous". Because it is anomalous, it should not be extended by judicial decision to the benefit of barristers. This view has previously been taken by some courts in Australia. Dealing with the matter more broadly, however, the Chorley exception is not only anomalous, it is an affront to the fundamental value of equality of all persons before the law. It cannot be justified by the considerations of policy said to support it. Accordingly, it should not be recognised as part of the common law of Australia … [39] For these reasons, in the absence of a compelling reason to the contrary, this Court should now accept the "logical answer" and hold that the Chorley exception is not part of the common law of Australia, as foreshadowed by the majority in Cachia.[citation omitted] … [53] It is sufficient for present purposes to say that whether or not an incorporated legal practice that is a vehicle for a sole practitioner should be able to obtain an order for costs for work performed by its sole director and shareholder is ultimately a matter for the legislature. Whether the Chorley exception is part of the common law of Australia is a matter for this Court.
The High Court was critical of the Chorley exception and the ramifications that it could have in practice in its application as it relates only to solicitors, engendering privilege and inequality before the law. It highlighted the undesirability of circumstances in which a solicitor would act for themselves. Underlining this concern is the maintenance of objectivity as a result of the solicitor's own self-interest, the lack of an impartial mind may inadvertently increase legal costs.
The decision of Kiefel CJ, Bell, Keane and Gordon JJ was that the Chorley exception was never part of the common law of Australia. Gageler and Edelman JJ agreed with the plurality.
Nettle J, in dissent, agreed with the ultimate result. However His Honour stated that whilst the Chorley exception did not extend to barristers and ought not to be applied in this particular case, His Honour did not agree with the abolition of the Chorley exception from Australian common law. His Honour was of the view that the decision had wider ramifications which may arise from abrogating the exception. His Honour suggested that the abrogation of the exception should be considered by parliament where the nature and the extent of the potential regulatory and fiscal consequences could be measured and balanced.
The court left open the question in relation to a solicitor employed by an incorporated legal practice for which they are a sole director and shareholder who is party to proceeding.
For subsequent decisions on this topic see Burrows v Macpherson and Killey Lawyers (Sydney) Pty Ltd [2021] NSWCA 148, and United Petroleum Australia Pty Ltd v Herbert Smith Freehills [2020] VSCA 128.

The plaintiff's submissions

The plaintiff in his submission relied on the High Court's ruling in Bell Lawyers as a general rule that a self-represented litigant may not obtain any compensation for the value of their time spent in litigation, as the High Court in Bell Lawyers held that the Chorley exception should not be recognised as part of the common law of Australia.
As such the costs ordered by the lower court against him are unrecoverable as Kent Attorneys were aware of the decision made in Bell Lawyers while they pursued litigation. The plaintiff also submitted that the orders of the Local Court are unenforceable and made without power to do so.
The plaintiff seeks for the litigation against him to be concluded. The matter is still before the Local Court of NSW awaiting this judgment of this Court.

Resolution

While this judicial review raises an interesting legal question, it is not one for determination here. Section 69(2) of the Supreme Court Act states that jurisdiction of the court to grant relief does not apply to any writ of execution for the enforcement of a judgment or order of the Court or any writ in aid of such a writ of execution. An examination order is an order for the enforcement of a judgment. Therefore the Supreme Court Act s 69(2) applies and the plaintiff cannot seek a judicial review pursuant to s 69(3) of the Supreme Court Act.
If I am wrong and the plaintiff is entitled to seek judicial review in this court, the costs payable to the court registry for the issue of an examination order apply regardless of whether the party issuing it is a legal practitioner. The compulsory payment of this fee by the legal practitioner does not put in a preferred position to ordinary litigants. The amount of professional costs awarded to the solicitor in seeking to enforce his judgments are modest. In the exercise of my discretion, for these reasons I would dismiss the application for judicial review.
The result is that the plaintiff's application for judicial review fails.

Costs

Costs are discretionary. Normally costs follow the event. However as the defendant filed a submitting appearance, I make no order as to costs.

The Court orders: 1. The summons filed 19 May 2020 is dismissed. 2. There be no order as to costs

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 September 2021

Supreme Court Act 2005(NSW)

Summons Seeking Judicial Review

By summons filed 19 May 2020, the plaintiff seeks: 1. That the Orders of the Local Court on 4 February 2019 in the amount of $1,820.20 and $1,876.60 be set aside. 2. That the Orders of the Local Court on 27 June 2019 in the amount of $2,139.40 be set aside. 3. That the Orders of the Local Court on 8 August 2019 in the amount of $3,000.00 be set aside 4. That the matter be subject to an order in the nature of certiorari in proceedings 2017/273885 and 2018/204097. 5. An order that time to lodge the application for judicial review be extended to the date of filing this application. 6. In the alternative, that proceedings 2017/273885 and 2018/204097 be transferred to the Supreme Court of New South Wales. 7. In the alternative that proceedings no 2017/273885 and 2018/204097 are not enforceable because of the High Court's decision in Bell Lawyers v Pentelow [2019] HCA 29.

At a glance

Court

Decision date

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Judgment (10 paragraphs)

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Legislation Cited (2)

Cases Cited (3)